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Transcript
Chapter 9
Designing
and
Managing
Products
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing for Hospitality and Tourism, 4th edition
Kotler, Bowen, and Makens
“Profit is payment you get when you take
advantage of change.”
-Joseph Schumpeter
“Being fed a decent meal in a casual
environment is a commodity in far
more supply than demand.”
-Barry M. Cohen
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Chapter Objectives
• Define the term product, including the
core, facilitating, supporting, and
augmented product
• Explain the elements with which one
needs to be concerned when designing
a product
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Chapter Objectives
• Understand branding and the conditions
that support branding
• Explain the new product development
process
• Understand how the product life cycle
can be applied to the hospitality industry
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
What is a Product?
• A product is anything that can be
offered to a market for attention,
acquisition, use or consumption that
might satisfy a want or need
• Includes physical objects, services,
places, organizations, and ideas
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Levels
• Core Product
• Facilitating Products
• Supporting Products
• Core Competency
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Core Product
• What the buyer is really buying
• Every product is a package of problemsolving services
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Facilitating Products
• Goods or services that must be present
for the guest to use the core product
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Supporting Products
• Extra products offered to add value to
the core product and help to
differentiate it from the competition
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Core Competency Review
• Supporting products offer a competitive
advantage only if they are properly
planned and implemented
• They must meet or exceed customer
expectations to have a positive effect
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Augmented Product
• The augmented product includes
accessibility, atmosphere, customer
interaction with the service organization,
customer participation, and customers’
interaction with each other.
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product
levels
(Adapted from
C. Gonroos, “Developing
the
Service Offering—
A Source of Competitive
Advantage,” in
Add Value to Your
Service,
C. Surprenant, ed.,
Chicago:
American Marketing
Association,
1987, p. 83.)
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Atmosphere: The Physical
Environment
• Can be the customer’s reason for
choosing, or not choosing, to do
business with an establishment
• Multidimensional
– Visual, aural, olfactory, tactile
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Customer Interaction with
the Service Delivery System
• Joining stage is when the customer
makes the initial inquiry contact
• Consumption phase takes place when
the service is consumed
• Detachment phase is when the customer
is through using a product and departs
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Customer Interaction with
Other Customers
• Hospitality organizations must manage
the interaction of customers to ensure
that some do not negatively affect the
experience of others
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Customer Coproduction
• Increase capacity
• Improve customer satisfaction
• Reduce costs
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Brand Decisions
• A brand is a name, term, sign, symbol,
design, or a combination of these
elements that is intended to identify the
goods or services of a seller and
differentiate them from competitors
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Brand
• Brands are among a company’s most
valuable assets
• A Brand represents what the company is and
what it stands for
• A Brand implies trust , consistency, and a
defined set of expectations
• The strongest brands own a place in the
customer’s mind
(Scott Davis, Brand Asset Management)
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Branding
Consistency
Quality & Value
Attributes
Advantages
of
Brand Names
Identification
High Brand
Loyalty
Brand
Equity
Strong Brand
Association
Name Awareness
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Perceived Quality
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Conditions that Support Branding
• The product is easy to identify by brand or
trademark
• The product is perceived as the best value for
the price
• Quality and standards are easy to maintain
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Conditions that Support Branding
• The demand for the general product class is
large enough to support a regional, national,
or international chain
• There are economies of scale
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Leveraging Brand Equity
• Cobranding
• Partnerships
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
New Product Development
• Product life cycle
– Product is born
– Passes through several phases
– Eventually dies as younger products come
along that better serve consumer needs
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
New Product Development Process
Marketing
Strategy
Development
Concept
Development
and Testing
Idea
Screening
Idea
Generation
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Business
Analysis
Product
Development
Market
Testing
Commercialization
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Idea Generation
• Internal Sources
• Customers
• Competitors
• Distributors and Suppliers
• Other Sources
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Idea Screening
• The purpose of screening is to spot
good ideas and drop poor ones as
quickly as possible
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Concept Development and
Testing
• A product idea envisions a possible product
that company managers might offer to the
market
• A product concept is a detailed version of
the idea stated in meaningful consumer terms
• A product image is the way that consumers
picture an actual or potential product
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Concept Development and
Testing
• The task is to develop an idea into
alternative product concepts, determine
how attractive each is to customers, and
choose the best one
• Concept testing occurs within a group
of target consumers
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Marketing Strategy
• Includes information such as the target
market and product positioning as well
as both short and long term projections
in terms of sales, profits and costs
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Business Analysis
• Business analysis involves a review of
the sales, costs, and profit projections to
determine whether they satisfy the
company’s objectives
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Development
• The prototype must:
– Have the key features described in the
product concept statement, as
perceived by the customer
– Performs safely under normal use
– Be produced for the budgeted costs
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Test Marketing
• The product and marketing program are
introduced into realistic market settings
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Commercialization
• In launching a new product, a company
must make four decisions:
When?
Where?
To whom?
and How?
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Development
Through Acquisition
• A method of product development that
reduces the risk considerably for large
companies that have the assets to
purchase and then develop a fledgling
chain
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Life-Cycle Strategies
•
•
•
•
•
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Product development
Introduction
Growth
Maturity
Decline
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Development
• Product development begins when the
company finds and develops a new
product idea
• During development, sales are zero and
the company’s investment costs add up
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Life Cycle
Sales and Profits Over the Product’s Life From Inception to
Demise
Sales and
Profits ($)
Sales
Profits
Time
Product
Development
Introduction
Growth
Maturity
Decline
Losses/
Investments ($)
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Introduction
• Introduction is a period of slow sales
growth as the product is being
introduced into the market
• Profits are nonexistent at this stage due
to high product introduction expenses
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Growth
• Growth is a period of rapid market
acceptance and increasing profits
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Maturity
• Maturity is a period of slowdown in
sales growth because the product has
achieved acceptance by most of its
potential buyers
• Profits level off or decline due to
increased marketing outlays to defend
the product against competition
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Decline
• Decline is the period when sales fall off
quickly and profits drop
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
Product Deletion Process
(Martin Bell, Marketing Concepts and Strategy, 3rd ed., p.267, 1979, Houghton Mifflin Company; used by permission, Mrs..
Marcellette (Bell) Chapman. )
©2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens